WELL WHS fits $7.05,, Well can remember when winner69 would not BUY at $2.60 he stated then they where to DEAR ..[8D]
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WELL WHS fits $7.05,, Well can remember when winner69 would not BUY at $2.60 he stated then they where to DEAR ..[8D]
Tesco tipped as Red Shed bidder says the New Zealand Herald.
A major player in the international grocery business has expressed interest in buying into The Warehouse, a source close to Stephen Tindall says ... However, the interested party is not yet involved in formal discussions, the source says.
http://www.nzherald.co.nz/section/pr...ectid=10410563
Look like a good time to get some shares here.
Fodder, fair enough to throw the quote that I dished out back at me.Quote:
quote:Originally posted by Fodder
Originally posted by Snoopy
So does that make the people who 'held out' and didn't sell their shares to Foodstuffs clever, sensible or merely lucky? I pick the latter.
No it makes them one thing Snoopy:Patient..........
............."The Sharemarket is the transfer of wealth from the impatient to the patient" ;)
However, to reprise the situation: I had some WHS shares. I had a price at which I was willing to buy more. I had a price at which I decided I would sell up and look at other opportunities. These prices were predicated on Stephen Tindall being content with the status quo of his own shareholdings. In order to judge my actions you have to look at the reasonableness of this last assumption.
For a start Tindall floated the Warehouse business himself. Can you name another entrepreneur who floated his own business then subsequently bought it back? No? Then what probability would you give to Tindall doing this with the Warehouse (without the benefit of hindsight)?
What chance do you think of Tindall wanting to sell out to Wal Mart or another big international player, given that he has just tried to buy the company back himself? Before today's announcement concerning Tesco, I would say 'very low'.
What chance would you give to Tindall wanting to retire from his Warehouse directorship, cut the cash supply off to his Tindall foundation and put those shares on the block too. Given Tindall is still pretty much a business dynamo, I would say 'very low'.
The key factor in what is happening at the Warehouse centres around ST contolling the direction of the company he founded via the share register. Personally, before this year, I couldn't think of a top twenty company *less likely* to have a change in contolling shareholder. But that doesn't rule out the unlikely happening!
While patience is a virtue, particularly in investment matters, you have to balance the likelihood of an outcome with the payoff if that outcome happens. Warehouse was always going to be a strategic asset and, to the right retailer, worth a lot more than the underlying economics of the Red Sheds (read has a high payoff). But there are plenty of NZ companies out there with much more open share registers than WHS, that are equally strategic: e.g. Sky City, Fletcher Building and Telecom. To me it makes much more sense to have patience in investing in those shares rather than the Warehouse.
To sum up: I had an investment plan, I stuck to it, I made some money (albeit not as much as if I had held on). To outperform my investment strategy I would have had to have relied on an unlikely event. I don't bet on unlikely events. Thus IMO those investors who held on through the Foodstuffs offer were wrong, even though as it happened to turn out, they are now richer than I am.
SNOOPY
discl: ex WHS holder
Snoopy. Mr G Hart floated Rank and then rebrought his company and it is getting very common overseas with PEP help. His experience with the sharemarket disillusioned him that he trys to avoid them now.
Bling Bling says why would ST tell the market that there is another interested party when the party itself has not even made a formal offer on the table? Maybe ST is getting ready to sell at the right price while ramping up the price helps in his decision? :D
ps: Stores that are too big pisses Bling off, cos it takes Bling over 30 mins running around to find out that they dont stock that particular item Bling is after ! [xx(]
Good on those who held this shares. Wish I bought some when they were under $4.
Westfield have published a report after 9 months
of trading, has some interesting information
with statistics for growth in different countries, store type and product category.
http://sa.iguana2.com/cache/ce235434...WDC-434096.pdf
Fair enough, it's likely that a lot of people wish that they bought Warehouse shares under $4 at the moment. But to improve your chances of future success you need to solidify your approach and attitude towards investing.Quote:
quote:Originally posted by lager
Good on those who held this shares. Wish I bought some when they were under $4.
Quote:
quote:Originally posted by lager (in RBD - Restaurant Brands)
Buying shares is a form of gambling. It's also un-predictable.
Foodies must have done a deal with Tindall, but don't see how they are going to get past Woolies.
Foodstuffs aims to buy Warehouse
NZPA | Thursday, 21 December 2006
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Supermarket operator Foodstuffs has applied for Commerce Commission approval to buy discount retailer The Warehouse.
The three Foodstuffs cooperatives have applied for regulatory approval to buy 100 per cent of The Warehouse shares.
Foodstuffs is New Zealand's largest grocery retailer and owns the New World, Pak'N'Save and Four Square brands.
The Warehouse operates The Warehouse and Warehouse Stationery.
Warehouse founder Stephen Tindall, in a consortium with Pacific Equity Partners, said in September he planned to offer shareholders $5.75 cash per share in a bid to take The Warehouse private.
Mr Tindall's family interests and the Tindall Foundation hold around 51 per cent of The Warehouse.
He pulled back from the bid on October 30, after Australian supermarket giant Woolworths bought 10 per cent of The Warehouse, helping lift the company's share price.
The other member of the New Zealand supermarket duopoly, Foodstuffs, had previously bought 10 per cent of The Warehouse.
Both Woolworths and Foodstuffs were therefore in a position to block any formal takeover attempt.
Today's announcement was released after the market closed.
Shares in The Warehouse closed up 2c at $6.92.
http://www.stuff.co.nz/3907370a13.html
Maybe a majority stake will be enough for foodstuffs???? and then let woolies sit and stew as a minority
Applying for Commerce Commission approval is also a cheap method of under-pinning the share price without having to outlay a couple of hundred million in borrowed readies. It has the added "Art of War" bonus of making any shares a competitor buys (especially a better financed competitor) more expensive so that if an eventual takeover battle is lost, the returns demanded by the victorious competitor actually render them less competitive in the process. ...i.e "synergy" savings are eaten up by lower returns / higher initial sunk cost, making the prospect of aggressive market share expansion less attractive and thereby protecting Foodstuffs patch.Quote:
quote:Originally posted by living2
Maybe a majority stake will be enough for foodstuffs???? and then let woolies sit and stew as a minority
Just sit back and enjoy the ride. :D
Do Commerce Commission applications have to be publicly notified? The news has a strategic smell to it... ;)
Looking at WHS on a trading level (excluding property disposals etc), it would appear that the company is holding up well given that the economy is slowing. It is good to note that operating margins are being maintained
Warehouse Christmas trade below expectations
"Our trading result over the total Christmas period was our best for three years but still below our own expectations."
Same store sales for The Warehouse during November and December were 2.3 per cent ahead of the same period last year, with total sales for the first half of the financial year ended January 28 expected to be 2.9 per cent ahead of the same period last year, The Warehouse said.
Operating margins for the first half were expected to be maintained at levels similar to the same period last year.
Will WHS end up like SCY and generate its growth from its finance arm?
The Warehouse - one of its best kept secrets
The Warehouse Financial Services (WFS) may do little in the way of advertising, but it has quietly been building itself up into one of the heavyweights of the consumer finance sector.
"I think we make a healthy contribution to (the company's joint venture owners) Warehouse Group and to Westpac," WFS general manager Ed Hayes said, although he refused to disclose any financial details.
As it turns out, that "healthy contribution" was $14.14 million which WFS paid out in dividends last year, giving The Warehouse and Westpac just over $7m each, although those were the first dividends they have received since setting up the joint venture in 2001.
In terms of its asset base, WFS is a middling player in the consumer finance market, with total assets of $83.3m.
But when it comes to profitability, WFS punches well above its weight.
The company posted a net profit of $7.9m for the year ended September 30 and only three of the 10 companies in the KPMG survey earned more.
Way the price falling the last few days makes you think that Commerce Commission has some bad news on the way
Anybody taking a gamble ..... +ve from CC and WHS goes back to 750 .... +17% .... worth it?
I wouldn't take the bet. Commerce commission should decline as it will substantially lessen compettion in the supermarket business, there are enough barriers to entry for any new competitor ie RMA, why would the CC seek to preserve a duoploly.
Works for Foodstuffs and Woolworths as they will appeal with the effect of delaying the launch of any new Warehouse Extras.
i don't think it will lessen competition in the supermarket business, as the warehouse isn't seriously in the supermarket business anyway!
do you know anyone who buys their food from the warehouse? i don't
And at this rate no-one ever will, so duopoly profits will continue for Foodstuffs and Woolworths.
Competition is good for the economy. For this market it will give consumers more cash to spend on other products and services, and prevent ditributed cost and concentrated benfeits for supermarket Foodstuff owners and profits from leaking offshore to Woolworths shareholders.
CC will be wel aware of this and should have the numbers to back this up from overseas markets.
They will now be dotting their i's and crossing there t's anticipating the appeal.
Consumer Mag had Warehouse as expensive for groceries.
Their mastercard is good value though, I use it.
Quite a bit of support today. Anybody catch the comments on ASB business today from a Macquarie analyst?
It was based on the same information as this article in the New Zealand Herald: Woolworths sets its Warehouse priceQuote:
quote:Originally posted by stephens.pc
Quite a bit of support today. Anybody catch the comments on ASB business today from a Macquarie analyst?
Woolworths has told The Warehouse Group it is prepared to pay $7.15 a share to gain control of the Red Sheds company, the Business Herald understands.
The approach - contained in a written proposal to the retailer's board - was made in April, two separate sources say.
It's no great surprise that this has spawned another story during the day Warehouse 'may be in breach' of NZX rules
Stock exchange operator NZX said The Warehouse would be in breach of listing rules if it had received a takeover offer without disclosing it.
All down the tubes as CC says no - Doesn't anyone know that fat profits from a takeover of this outfit are as remote as a heatwave in the Arctic circle?
Warehouse quadruples profit
So says the Herald .... and the shareprice goes down
Suppose its all on again with Woolworths et al winning the appeal
Good return for those who took a punt around the 500 mark as well
Still think Woolworths will be very interested .... at what price?
$7 eventually, when the auction finally comes to an end, but the opening bids will be somewhat lower. It will be an out-and-out war between the two bidders, who will be taking the longer-term view and won't be too influenced by the market oscillations since their original expressions of interest.
The Dominion Post Says:
Analysts are expecting a takeover offer for The Warehouse at more than $7 a share will be on the table this year, despite the Commerce Commission's attempts to block the likely bidders.
Macquarie Equities analyst Warren Doak said The Warehouse could attract a takeover bid from either of the supermarket companies at about $2 above the current market price ...
First NZ Capital analyst Sarndra Urlich agreed, saying the commission's original rationale for blocking the two companies was flawed. A bid of $7.20 a share would represent full and fair value, she said.
The article is here: More than $7 a share tipped for Red Sheds
The appeal is on this week with most predicting that it will fail. What would be the risk/reward of taking a punt on this outcome?
Steve, I haven't been a Warehouse shareholder for a while. I got out 'too early' (said with hindsight. Of course I considered it a great deal at the time because I didn't regard Tindall as a willing seller back then). $5 was a good price when I got out because Foodstuffs were prepared to pay that premium to get in the share registry door.
Based on trading performance WHS wasn't worth anything like $5 and even today I would rate the 'intrinsic value' of WHS as below $5. Of course the 'strategic value' of WHS is quite different.
The $5.70+ price range only came into play after Tindall decided to try to privatise the company aftwer Foodstuffs was established on the share register. Woolworths Australia came out of the woodwork to trump that bid and establish their own blocking stake. Both Tindall and Foodstuffs involved Australian merchant bankers in thier proposed takeover bids. The merchant banking market has taking a bit of a hit since then. My feeling is that neither Tindall nor Foodstuffs will be able to fund a bid at the oft rumoured $7 takeover price. That just leaves Woolworths Australia that probably could. However, with 'no competition' why would they?
If I was WOW management I would wait for the retail downturn to bite further then wade in with a $6 bid in a couple of years time. There is certainly no hurry to buy WHS because Woolworths can block any other bid in the meantime.
I can see both upsides and downsides in WHS at $5.70. But with so many other great retailing companies selling so cheaply, I'm not chasing WHS myself as an investment proposition.
SNOOPY
I agree with you Snoopy. I have been in and out of WHS a couple of times. There are better plays in the market at the moment than WHS. The downside risks out weighs the upside benefits, so I am out.
I am gonna put my neck out and say the apeal will fail. I dont think CC will apeal if they think there is no likely chance of winning it.
You know how bad it is out there when a discount retailer like WHS is having big downgrades. Expect more downgrades in the future? I guess so.
Shopping slump hits Red Sheds
Shares in The Warehouse Group dived yesterday after the company downgraded its profit guidance by 10 per cent because of deteriorating consumer confidence and retail spending.
http://www.nzherald.co.nz/section/3/...ectid=10518813
From memory, in the past WHS has been less affected by economic downturns than other retailers as when the household gets short of cash, shoppers shift to WHS to obtain a perceived bargain...
I believe there are three factors which are different this time for the warehouse and to some extent other "cheap stores"
1) The two dollar shops which have sprung up in every mall. Compete with the warehouse bottom end stuff
2) Trademe , the warehouse brigade have finally made it online and are the heaviest users of trademe. Instead of hanging around in the malls they are increasingly hanging around online , buying real bargains
3) The warehouse is old now , and seen as boring , i remember a time when you could go in and pick up real bargain computer games at crazy prices , now they not much different from other shops.
The trademe phenomenon is fairly new in its impact , however expect it to have a marked effect on the likes of the warehouse briscoes and pumpkin patch to name but a few
Good points ratkin - esp your comments that The Warehouse is 'old now and boring' and the impact trademe might be having on them ..... I feel the the 2 points are to some degree related.
To me the Red Sheds have reached saturation in NZ and unless there is a radical change in their offer it is hard to see them growing any faster than the general economy. Their efforts to go slightly upmarket might have put some 'better' quality products in stores but it probably dilutes their previous real point of difference - being sort of cheap and nasty where you did get a real bargain.
It also appears they have lost quite a lot of business to the likes of other big box retailers like Mitre 10 Mega and Bunnings -- leaving clothing and shoes almost as their core business and that is not really a good place to be
With expected earnings to be around $80m this year even at the real cheap price of 419 that is still 16 times earnings
So is there a takeover premium still in the price and if so is the touted 700 a dream now? Or has the market assumed that Woolworths etc won't be allowed to take them over.
Be interesting to see what happens over the next few months
When is the appeal result being released?
I am guessing that CC will have more chance of winning now with climbing food prices?
Dr Who there will be hell topay if commerce commision do not. Why is the cheapest milk in a supermarket up to A $1.00 dearer than a corner store if they take over warehouse it will let them increase their margins even more as people only check supermarket prices thinking as they are so large they must be the cheapest.Why has the Mt Wellington area of Auckland got the cheapest groceries in Auckland. Bananas at PAK & SAVE (pig food quality)$2.49 per kilo good quality Bananas at vege shop 100 meters up the road $0.99 per kilo. We definately need at least one more supermarket chain
Cant see how the CC have any grounds to prevent the takeover. There used to be 3 chains and the CC had no issue with Progs buying Woolies. And Woolies were up and running, profitable, had national distribution all the things the Warehouse doesn't have.
Competition was significantly lessened when Progs bought Woolies. The purchase of the Warehouse won't lessen competition in the grocery market any more than if they bought Farmers Kmart's stores etc etc.
The horse has bolted Possum...
Dr Who Warehouse if it gets into Extra stores with supermarkets in store. The Warehouse Extra Store in Sylvia Park has made Mt Wellington the cheapest for groceries. Even though is not getting the same buying deals as Woolworths and Foodstuffs. Comerce Comission had no choice about the Progressive Enterprises take over of Franklins. Because owner said we sell or we shut doors. And as both Woolworths and Foodstuffs have blocking stakes will either party give in to let a take over ever happen. In the mean time the warehouse has stopped expanding. So both Foodstuffs and Woolworths doing what they like increasing their margins.
This looks like a no brainer play
1. Takevoer should be approved with price going up
Q. Is the takeover going to lessen competition?
A. Only in Sylvia Park [plus a few other markets]. For the rest of the country what competition. The law does not attempt contemplate what the effect on competition may be in 10 years. but judges can do what they want....
2. Don't think the brains trust at WHS have been sitting on their behinds for the past 2 years, they will have a plan B if acquisition is declined. Price should go up.
3. To get a blocking stake [of up to 20% each] Foodies and Progs will have to buy some more shares. This would push the price up to $7.00.
4. Worst case ie nothing happens. A PE of 16 at bottom of the cycle is not too traumatic to turn this into a hold. Also consider the strategic value of the retail footprint.
Cheers
I really dont think we have seen the bottom of the retail cycle. Not by a long mile.
A possible T/O target, yes. But then it is a gamble.
For a start a blocking stake is 10%, not 20%. Both Foodstuffs and Woolworths Australia already have this. So there is no need to buy any more shares to block any deal.
'Plan B' was Stephen Tindall's mooted $5.70 offer to privatise the company before first Foodstuffs then Woolworths Australia gained their blocking stakes. However that offer was put together with a merchant bank in Australia before anyone had heard the term 'credit crunch'. There cannot be a 'plan B' without both Foodstuffs and Woolworths agreeing to sell out. At the moment in this credit squeezed market, my guess is that only Woolworths would be able to stitch together a deal. And the lack of a competitive offer means they would not need to bid anywhere near $7. Remember Foodstuffs only paid $5 for their stake. In this market a Woolworths bid of $5.50 would be a super premium to the market price and could be a goer.
We have already considered the strategic value of the local footprint. That is why Foodstuffs and Woolworths were sniffing around and bought their stakes. Don't overplay the hand by counting the chips twice!Quote:
4. Worst case ie nothing happens. A PE of 16 at bottom of the cycle is not too traumatic to turn this into a hold. Also consider the strategic value of the retail footprint.
And what 'E' did you use to calculate your PE ratio hairdresser? Last years reported 'E' or the forecast 'E' for this year?
I haven't followed WHS closely since I ceased to be a shareholder a couple of years back. Perhaps it is a good buy on today's market? It might very well be. The only problem is I can think of a number of retail shares out there that are even better buys...
SNOOPY
Bought at 3.90
Hey Footsie, we finally agreed on something. :p I too bought into WHS today. Gonna be tucked away in the long term portfolioly.
WHY buy Warehouse when you get a lot more for your money and cum div @ the good stores of SMITH CITY..
DONT be SO sure that Warehouse will end in a takeover and could end up back at $2.50 if the wheels fall off the deal, Don't forget the owner of WHS dose not want to be taken over and doing his best to fight that's why they are in court all the time, Where Smiths City is already at the bottom and making profits and paying Div`s it also could get taken over with a bigger price RISE..
I'm pretty sure WHS will eventually be taken over. The Commerce Commission is taking the court action, not Stephen Tindall. In fact, didn't ST try to come to an arrangement with Foodstuffs quite early on in the piece before Woolworths stepped into the fray? Or was it the other way around?
The CC's contention that WHS provides competition to the big 2 supermarket chains looks a bit far-fetched to me. I suppose, though, we shouldn't rule out political meddling in the name of " protecting essential businesses" at this touchy stage of the electoral cycle.
;)
$2.50? Wow, at that price I will backing the truck and loading it with shares. Falling sp dont concern as I will buy more. I have a longer view on WHS and will continue to buy if it falls. :)
Politics wont come into play for WHS. It is not a strategic asset.
Very nice. I sold out at slightly lower level, still, a profit is a profit, one cant complain. People fail to realise that WHS is the only one around with a dominant market share for its sector and a good retail location spread around NZ. Cheaper and more time efficient for a competitor to buy it out than to start from scratch.
The WHS is an instiution. They are like Marks and Spencer. Everyone has something at home from the WHS.
Kiwis have an affinity with the red sheds.
to be honest at $2.50 i'd probably be happy to park my whole portfolio in there....
today's sell off in the market is just what you;d expect... people were always going to sell the first rally.
[QUOTE=Dr_Who;214627]$2.50? Wow, at that price I will backing the truck and loading it with shares. Falling sp dont concern as I will buy more. I have a longer view on WHS and will continue to buy if it falls. :)
THEY where at $2.50 for a very long time even 69 said at the time they where to dear its only when they pulled out of Oz wounded and came back to NZ to recuperate that they came under attack and have never been left alone to get on with the JOB..
Where to from here? A chance for Tindell to get his hands on WHS and privatise it. Tindell only need to JV with a large overseas retailer to buyout WHS cheap in this environment.
1. NZSE announcement
WHS
31/07/2008
GENERAL
REL: 0854 HRS The Warehouse Group Limited
GENERAL: WHS: WHS - Commerce Commission Appeal allowed
31 July 2008
THE WAREHOUSE GROUP LIMITED
Commerce Commission Appeal allowed
The Court of Appeal announced this morning that it has set aside the
clearance granted by the High Court for Woolworths and Foodstuffs to acquire
up to 100% of the shares in, or assets of, The Warehouse Group.
The Warehouse Group Limited will not make any further comment on the Court of
Appeal decision until it has received the full judgment and has considered
its implications.
ENDS
End CA:00168027 For:WHS Type:GENERAL Time:2008-07-31:08:54:29
2. Newspaper Article from Stuff.co.nz
Warehouse takeover blocked by court
Reuters | Thursday, 31 July 2008
BREAKING NEWS: The Court of Appeal has overturned a lower court's ruling allowing rival grocery firms to bid for discount retailer The Warehouse Group Ltd.
The court has prevented Australia's Woolworths Ltd and New Zealand co-operative Foodstuffs bidding for The Warehouse, New Zealand's largest listed retailer in a deal that could be worth over $2 billion.
In a summary of its decision, the Court of Appeal said the appeal of the Commerce Commission against a High Court decision letting the two retailers lodge takeover bids would be allowed.
It set aside the clearances granted in the High Court and ordered the two supermarket chains to pay costs to the regulator.
Shares in The Warehouse closed on Wednesday at $3.82 after trading between $3.77 and $6.66 over the past 12 months.
The Commerce Commission argued that if either supermarket chain bought The Warehouse, it would result in a substantial lessening of competition.
The Warehouse sells a broad range of general merchandise in its 85 "Red Shed" stores. It is about 50 percent-owned by founder Stephen Tindall and interests close to him, while Woolworths and Foodstuffs each own about 10 percent.
well that was painful
I was on the bid at 3.00 on the open for more and missed out by 1c...... ahhhhh
bought more at 3.24
too cheap.
will rebound
It used 3.20 as support in May 2005. Seems like a good level to find support now.
Yep, I bought more also. This is going in the long term portfolio.
In the long run I will look back and wonder why I didnt buy more. I recall WHS a few years back when the sp were trading at these levels and having problems with their Aussie operation and everyone bragging what a dog it was.
There will either be a supreme court appeal or another party or Tindell coming to the party to T/O it at these levels. Good things dont stay down too long.
for long term players
WHS is an institution.... any lower and mum and dads will be queing up to buy
It's probably the most well known company on the NZX.....as it reaches across all areas of society.
might bounce between 3.10 and 3.20 for a while but you still get a dividended and even if the recession is bad... i doubt profits will fall much more that what they are down to now.
there is probably even a short term trade in here.... im sure it will bounce once the offshore hedge funds are out.
WHS wont be around for long. Someone will eventually take it out. Be it Tindell or another party, it will be like all the other good NZ asset, gone from the NZX.
It is not in Tindell's best interest to see revenue growth in WHS when he wants to privatise it himself. He will want to buy it out cheap. "Everyone gets a bargain".
kiwisaver funds should be using today's volume to buy into a NZ icon
looks like they are probably the ones buying off the o/seas hedge funds
I bought today at 3.20.
This was my first ever share purchase. I'm looking at the long term and didn't bet the farm, so I am feeling pretty good about it. :)
Regards
Cadmium
I still think the shareprice is too high. Surely in this market you want to buy at a really cheap price ... there is so much to chose from. At $3.24 with forcast 2008 eps of 25.8c that is a PE of 12.56. For a retailer facing so many headwinds that is just way too expensive for me. Smith City are on a PE of 6 !!!!
"Where everyone gets a bargain" ... certainly not here !
Comparing Smith City with WHS is like comparing CDI with ING. I understand Woolies was prepare to pay north of $7 and Tindell was prepare to pay north of $5.75 and dont forget Foodstuff. I dont see anyone prepare to pay anything for Smith City let alone a premium.
The store locations WHS have and the market share they have is worth a premium.
WHO your counting your chickens before they hatch, and your going great guns loosing 70 cents today on your first bet even if you bought today you are now holding an average $3.55+ you could have waited for today and you would have been better off, So SCY down 0 up 0 but still cum div till next Friday that's CASH in the hand NOW..
Comparing Smith City with WHS is like comparing CDI with ING. I understand Woolies was prepare to pay north of $7 and Tindell was prepare to pay north of $5.75 and dont forget Foodstuff. I dont see anyone prepare to pay anything for Smith City let alone a premium.
Dr who - that was then this is now.
Tend to agree with you Nelehdine and note that consensus 09 PE is about 12 too. That's cheap if the co is expanding or has critical mass to be a price maker (cf Woolworths/Coles) but the growth bubble has long since popped for WHS - to think it used to trade on a PE of nearly 30!!!!!
Furthermore what are Woolies and Foodstuffs going to do with their WHS stakes now? There may be an overhang as one or both decide to exit WHS, further depressing the share price (interested in comments from others here).
Nevertheless WHS is now on my watchlist as I await what happens to the Woolies/Foodstuffs stakes. If sold on-market it'll provide WHS with some much needed liquidity and perhaps become my first NZX share purchase in over five years.
SEC
Who's the Nong at the High Court who overturned the original Commerce commission decision in the first place ? What a waste of time and money.
Today's ruling is the best news for New Zealand.
Would love to see The Warehouse thru private equity or capital raising buy a lightning raid 10% blocking stake in Woolworths . Woolies is kinda cheap now , and the irony it would bring......WOW.
The game is not over yet. :)
Watch this space and think outside the square. Be there or be sqaure.:D
Timing looks about right for Tindall to get his bargain
http://www.nzherald.co.nz/section/3/...ectid=10524657
Nice bounce this morning. :)
Hey Footsie, you taking quick profit or holding on for bigger profit later?
Be there or be square! LOL
disc. Proud holder of WHS
ps: you guys who work on PE only are thinking inside the square!
i was out this morning.
I had an order left in the system at 3.49 from yesterday to sell half.... and arrived at my computer to find i'd been taken out. totally forgot about it.
i'll sit on the rest for the moment.
Bought some of these early yesterday. Looking like a good dividend payer for the bottom drawer.
Some possible potentioal for upside, but not a lot - I don't think retail is a growth area for a while.
Did nobody tell the Court of Appeal that most of us don't live in Sylvia Park or anywhere near Te Rapa, and that the chances of WHS expanding its food offering to take on WOW and Foodstuffs is virtually nil?
Disc: Disgruntled WHS holder.
:(
IF i remove my own bias
I actually think its a good decision
more supermarket competition is better.... I just wish WHS would roll out food across all its store.... AND LIQUOR..
you can build a store within a store.... and sell spirits...
now that's where the real $$$ are.
I actually think that the WHS entering into the grocery market is a big mistake. WHS dont have a competitive advantage in the grocery market sector and NZ is a very small market that may not be able to hold up three competitors.
Ive been out to the Slyvia Park and Manukau stores and have noticed that no one shops at the grocery area.
I have never been a retail investor fan but in my opinion i think there is plenty of updside for the big red shed.
Going back to the late 80's and ear;y 90's my view was TBRS were doing extremely well as all the penny pinchers flocked there. I see this trend continuing.
The whs exta (whatever its called) is the way of the future as well. the big supermarket chains know it. should the whe get into the hypermarket type of concept then it will be best primed to catilize on the future of retail shopping.
discl. dont hold
Go to Europe (Carrefour) or the US (Walmart, Costco)
Most low to middle income earners prefer the one stop shop....
its the more affluent who like specialty shops.
its the way of the future
but like i said..... Liquor and in particular spirits namely alcopops is the place for them to make big $$
If the WHS built a "box within a box" liquor store in every shop they'd double NPAT in 2 years. SIMPLE
PS I personally love shopping at WHS... you know what you are going to get and yuo know that basically, whatever you want ....will be there... in some way shape of form
Walmart are going gangbusters in the States at the moment, as people shop a little more downmarket. In Europe, the likes of Lidl and Aldi are the only ones growing.
To compete manfully in food, most red sheds that I have been to would need to extend, and many don't really have the area - except upwards. If they put food into existing stores, they then are taking away space from other profit making items.
Believe that most supermarkets make their larger margins from meat/deli/fruit & vege etc, not so much from dry goods. Needs more facilities, capacibilities etc. Too hard at present.
I don't really see them as being a threat on food, but Foodies and Woolies thought so, and taking advantage on WHS strength in hard goods.
I'd love to see more competition in the food business - it's just an all too comfortable duopoly for my liking.
Thats exactly why Tindall wants to take WHS private .... he wants to expand into groceries and like .... but recognises that is a risky strategy because some shareholders like Dr Who think it a mistake and most WHS shareholders would not appreciate another mistake or a few years of choppy earnings ..... he is prepared to take the risk himself so privatising is the best bet for him.
Wouldn't be easy but it took the mighty Walmart years before food was a success but when they perfected the model did sales take off. This is a good overview
http://www.coriolisresearch.com/news...ch_2006Q2.html
Agreed W69. Winning hearts, minds and wallets is a long term strategy requiring a long term vision. Given it can be expanded incrementally it's a relatively low risk strategy providing owners can accept low or negative returns until critical mass and optimal formula is achieved.
Personally I don't think their offer hits the mark yet - there are notable product gaps in some areas while others like dairy seem over-served in comparison. If they really wanted overkill in a category produce would seem a better place to attempt it - the current setup is underwhelming when you enter and sets the mindset for the rest of the store. There are also different disciplines involved in merchandising a supermarket that they still haven't executed cleanly... but then if my local Auckland Foodtown stores are anything to go by they have a few issues here too.
After the failed foray into Aussie, a recession looming and two giant grocery competitor breathing down WHS's back, it is wise for Tindell to privatise WHS. I dont think shareholders will support WHS into the grocery market after seeing what they have on offer in Sylvia Park and Manukua.
Tesco are under alot of pressure from the UK equivalent of the Commerce Commission. Tesco are about 33% of the supermarket trade and they won't let them grow anything further in the foiod business. Their growth is coming from the likes of trying to sell houses (failed) and other new business areas!!
There is a stat that £1 in every £5 spent in the High Street goes through a Tesco store.
Getting a bit off-topic for a thread on The Warehouse, but regulatory constraints on Tesco hasn't held back their financial performance too badly.
Tesco Profit for the year ending Feb (£ Millions)
2005 1,344
2006 1,570
2007 1,892
2008 2,124
Now if The Warehouse could turn in a similar rate of growth ...
I am wondering why Walmart, Tesco, Kmart etc wont make a T/O offer for WHS? Maybe WHS is too small for them?
DR Who K MART in NZ belongs Wesfarmers the owner of Coles and Bunnings and so far in debt. That I doubt anybody would lend them the money to do that. The Company that might is ALDI and that would really set the cat among the pigeons
Perhaps a couple of glasses of good pinot gris have made me over-optimistic but I see a good chance of WHS deciding to abandon the grocery idea; the courts deciding that there's therefore no reason to prevent a takeover; and the two supermarket giants resuming their tussle for control.
Don't see the SP getting back to previous highs, however.
Disc: small holding.
;)
Maybe WHS could have another go in Aust .... isn't this what they hocked off a year or so ago
Receivers In At Discount Grouo
http://business.smh.com.au/business/...0120-7ln3.html
If WHS is looking to go back into Aussie, I would recommend a SELL on it.